Category Archives: Money

Out of the interest rate trap: New service packages upset home loan customers

The need is great in terms of the interest slump – even with building societies. Given the income melt, they turn on the feed screw. Some institutes are carrying an annual service fee for existing contracts. Consumer advocates are angry and afraid that the example of school could make. “It’s as if a savings bank entry of customer demands for it because it maintains the building,” criticizes financial expert Hartmut Schwarz from the Consumer Bremen.
Mail from their building society currently gets, among other customers of Debeka, Signal Iduna, and LBS Bayerische Landesbausparkasse. Debeka wants for old contracts from the stock, are no longer actively sold, collect an annual fee during the savings phase of 12 or 24 euros. A Debeka spokesman explained the decision with the consequences of interest rate slowdown and the high cost of regulatory requirements. Annual fees are not uncommon in the industry, “with us they have been the exception,” the spokesman said.

In fact, for example, requires Bausparkasse Wüstenrot an annual account fee of 15 euros at their current tariff generation. Bausparkasse Schwäbisch Hall rises an annual fee of 12 euros. Even the Federal Finance Agency has set the safe custody of federal titles a few years ago, says a Swabian-Hall spokesman. “Behind this is indeed no small effort that not even the federal government can offer for free.”

The Signal Iduna Bausparkasse led the year a service fee for all customers and rates of uniformly 15 euros per year per account. The reasons are the low-interest rates and rising costs. Before there were different fee models. With the package were all fees incurred during the savings and loan phase one savings agreement, settled, the company advertises.

In contradiction, the fee is waived

At LBS Bayern it costs 9.60 euros per annum. However, the owners of older policies to checkout, which previously did not pay fees to ask the Bayern now. Consumer advocates Black fears that other building societies could follow suit.

Since Debeka and Co. changed the terms and conditions during the current contract, savings customers can object to the fee. Black recommends immediately “to disagree after receiving the information in writing, this service fee will be waived.”

The building societies stuck like other credit institutions in the low-interest rate case. Especially high-interest old contracts they burden. Despite the allocation of maturity, many customers do not take to complete their loan to as long as possible to benefit from the credit interest of the 90s. “The building societies have to create savings that they do not forgive the loans, according to the requirements of the Building Society Act in low-risk securities that hardly provide returns due to the policy of the European Central Bank,” a spokesman for the LBS Bayern describes the problem.

Account management is not the main power

Therefore, many banks announce high-interest old contracts that can be converted into loans for at least ten years and are not yet fully best part. This practice is legally controversial. End of February, the topic on the agenda of the Federal Court. In November, the Supreme Court has overturned the loan fee, which arose when Bausparer took the loan.

Consumer service fees or termination of high-yielding old contracts are annoying. The head of the Financial Supervisory Authority (BaFin), Felix Hufeld, however, warns, banks would have to reduce because of diminishing returns costs, develop other sources of income or question their business model.

Among lawyers, there are concerns, however. In contrast to the checking account along with debit card is the account management in the savings agreement is not the main performance, says law professor Christina Escher-Weingart from the University of Hohenheim and refers to the previous case. “The main achievement in the savings agreement is that the financial institution at a later date allows a subsidized loan -. And not the customer relationship in itself”
An account fee is only legally versed when it was said main power says, which specializes in banking law lawyer. “The fact that the building societies rely on account fees, as they would say,” we are working for you, dear customer, so give us time money. “- which is not allowed”

The financial question: Trouble with the effective interest

Remain hidden the true cost of many loans, because the legislature was going sloppy and the gaps in the regulation do not close.

The interest rates for home loans are in the cellar. Loans with a duration of ten years cost right now nominally 2.5 to 3 percent per year. A mortgage with 15 years fixed interest rate may be obtained for an annual nominal rate of 3 to 3.5 percent. These are fantastic conditions, so it is obvious to realize the dream of owning a home as soon as possible into action. Help in choosing the best loan is to offer the new Consumer Credit Directive. It has been applicable since 11 June 2010 and is celebrated by the Federal Ministry of Justice as a step forward for consumer protection. Who digs through mountains of paper, but soon realize that the new law for individuals standstill or regression means. The following examples make clear.

The financial question: Investors should bury hopes of high-interest rates

A builder needs 150,000 euros. The fixed interest rate should be ten years. The currently represents a borrowing rate of 3 percent per year. The initial redemption is 1 percent. This results in monthly installments of 500 euros. The remaining debt in ten years, if the interest and redemption are charged monthly, will be 132,532 euros. In order for the credit according to the accepted laws of mathematical finance costs 3.041596 percent per year, and the number – rounded decimal rounded to two places – had to call the lender in the past. In this specification, the consumer can not leave since of 2010.

Plenty of room for manipulation

The legislator wants for any reason whatsoever that the money lenders call an effective interest rate for the entire term. This leads in practice to severe problems because the lender must assume a fictional connection rate after the fixed interest rate. There are no rules so that the “manipulation” floodgates are open. In a subsequent rate of 3 percent of the effective rate remains at 3.04 percent. Climb the connection rate to 3.5 percent per year, 3.33 percent coming out, and the annual Prolongationszins drops to 2.5 percent, to 2.77 percent are called.

In the competition among banks, much imagination is required to guess the march towards the lender. They calculate with low connection rates so that the effective interest rate below the initial nominal interest rate slips. For this nonsense, the banks are not responsible. This is on the cap of the legislature, and the new feature means that consumers can forget the effective interest rate. He is no longer usable with such requirements.

The savings banks again demonstrate the courage to leave gaps

The best proof is the view of reality. The cooperative banks usually count on the initial nominal interest rate further. Equally, process large banks and mortgage companies. Only the savings banks have again developed the courage to leave gaps. You have the infamous discount splitting in the past – used for optical brightening of the effective interest rate – the division of paid losses and processing fees to different maturities. Today they use their terms and conditions. In the small print, it says for years and years that loans and credits to be extended after the expiry of fixed interest at variable rates. Consequently, the financial institutions assume today’s rates for the period after the extension.

Today’s interest rates are about 2 percent so that the savings banks call effective cost of 2.52 percent. The result is, of course, to say it again, no malicious challenge of the savings banks, but gross negligence of the legislator. The consumer pays for the fixed-interest, not 2.5 percent but 3 percent. Those who do not believe must establish repayment schedules. The outstanding balance of the savings will be in ten years at 132,532 euros. If the interest rate actually amounted to only 2.5 percent, a residual debt of 124,324 euros would come out. These are 8208 euros less. Therefore, lawyers should employ on occasion with the question of who is liable for the misleading of consumers.